Results at Wells Fargo and JPMorgan Show Slower Consumer Banking

The recent ascendance of consumer banking over Wall Street appears to have reversed course, at least for one quarter.

Wells Fargo, which has become the symbol for booming Main Street banking, on Tuesday reported a rare decline in profit compared with results in the period a year earlier.

JPMorgan Chase, on the other hand, announced that its Wall Street trading desks, which had hobbled the company in recent quarters, bolstered its overall performance in the first quarter.

“The figures from the banks — the first big financial firms to announce their first-quarter results — are a promising sign for Wall Street firms that have been struggling with new regulations and slow trading conditions.”

While consumer banking is not experiencing the explosive growth of seen by investment banks and investment bank divisions of large institutions, their performance has been improving over the past few quarters. And their financial results should further improve as the interest rate environment returns to more normal patterns. As this occurs, consumer banks’ net interest margins and profitability should continue to grow over time.

Overview by Ed O’Biren, Director, Banking Channels Advisory Service at Mercator Advisory Group